Bush Scores on Medicare
Former Florida governor and presidential candidate Jeb Bush stepped outside the political comfort zone and endorsed dramatic reforms to Medicare:
Republican presidential candidate Jeb Bush said Wednesday that we ought to phase out Medicare, the federal program that provides health insurance to Americans once they’re 65.
“We need to make sure we fulfill the commitment to people that have already received the benefits, that are receiving the benefits,” Bush said. “But we need to figure out a way to phase out this program for others and move to a new system that allows them to have something, because they’re not going to have anything.”
Bush praised Rep. Paul Ryan (R-Wis.) for proposing to change Medicare to a system that gives seniors medical vouchers instead of paying their bills directly.
(Arthur Delaney & Jeffrey Young, “Jeb Bush says we should phase out Medicare,” HuffingtonPost, July 23, 2015)
That kind of straight talk deserves praise, especially as so many Americans have allowed a few years of Medicare Trustees’ reports, which show a trivial improvement in the program’s finances, to give them an excuse to dodge the need for reform.
What politicians of both parties say about Medicare tends to be bereft of hard statistics.
Let’s try these numbers. (all rough)
Today we have about 50 million persons on Medicare, with an average per person cost of about $11,000.
People join Medicare at age 65 (unless they are disabled.)
They leave Medicare when they die.
Due to the baby boom and longer life expectancies, the number of persons on Medicare will surely grow to at least 75 million by about 2030.
If the cost per person is held at $12,000, the total bill will be $1 trillion. If the cost per person goes up like it has in the past, the total bill will exceed $1 trillion.
The economy in 2030 can probably handle an expense of $1 trillion. It might require a tax of 5-7-10% more than today.
This is not easy. But for Jeb Bush or Paul Ryan to say that Medicare will disappear is just demagougery.
By 2030 a larger per cent of voters will be in Medicare or close to it. It is not impossible for voters to vote in higher taxes for something they really want.
They surely can vote for higher taxes. They usually do so on “the rich.”
Converting Medicare to a premium support or voucher model from an open ended entitlement is not getting rid of it or phasing it out. It’s changing it.
The main issue would be the extent to which the value of the voucher keeps up with the actual cost of purchasing a policy that covers roughly the same actuarial value as today’s FFS Medicare provides.
Barry Carol made a good point. Jeb Bush should never have used the words “phase out Medicare.” With those simple words he was put on the defensive. Using the phrase “reform Medicare,” or “shore up Medicare” would have been better.
Moreover, in its current structure, Medicare has become a gravy train for fraudsters and providers alike. I have a report coming out later this year that shows how seniors could be given a high-deductible plan and an annual annuity payment for costs below the deductible. The health plan would have tools, and incentives for seniors and their care coordinator to steer them to lower-cost providers.
Way to go, Devon. I have been advocating a combination of high-deductible plans plus cash for quite a while. I never did figure out how to help the chronically ill seniors who need $15K of care at mininum every single year. I look forward to reading more about your concept.
RYAN VOUCHER PLAN FOR MEDICARE COST ROMNEY ELECTION So why does Jeb Bush want to make the same mistake. AARP and others buchered Romney via the Ryan Voucher Plan in Florida and other States with large numbers of seniors to the end that6 many seniors feared the Ryan Voucher Plan as much as they did Obamacare. Just as seniors are becoming aware of all the future threats to theor Medicare plus Supliment coverage via Obamacare those who advocate the Ryan Voucher Plan would throwaway the advantage that gave the GOP control of the House and Senate.
Devon
I too would like to read your report
The annuity would be great especially for younger people due to the age 59 and one half restriction
Think of how much interest the annuity could pay when withdrawals are limited
Next year we plan to come out with a fixed annuity paying an annual interest rate of 8 percent – guaranteed
We are already paying a 5 year guarantee of 10 percent per month on our patent product HMRA – a great way to accumulate a gap plan that builds monthly
$100 a month provides $10,000 of paid up medical benefits with zero deductible – guaranteed
A great way to save premiums on higher deductibles and more importantly have a systematic plan to build first dollar benefits under the increasing deductible
To learn more, go to nationalprosperity.com
Don Levit
Dlevit@nationalprosperity.com
Those benefits build to $10,000 of paid up benefits after 36 payments of $100 per month
Don Levit